What are the best Portuguese mortgages for non-residents?

If you're considering buying a property in Portugal as a non-resident, you may be wondering about your mortgage options. Luckily, numerous Portuguese banks offer mortgages to foreigners and Portuguese expats.

Read on to learn more about the best Portuguese mortgages for non-residents and how to compare offers quickly and without fees. Homevest, for instance, provides a fee-free mortgage comparison service in Portugal.  

Millennium BCP

Millennium BCP is a popular choice for non-residents seeking a mortgage in Portugal. They offer various mortgage options with competitive rates and favorable terms. Non-residents seeking a mortgage through Millennium BCP must purchase a property worth a minimum of 100,000 euros.

The variable rate is 1.5% + Euribor 12m, and the term range varies between 5 and 30 years.

Pros

• Multiple mortgage options with competitive rates and favorable terms
• Quick and straightforward application process

Cons

• A minimum property purchase amount of 100,000 euros, which might not suit all borrowers
• The mortgage process is not fully online; physical presence is required for signing the agreement

Banco Santander Totta

Banco Santander Totta offers mortgage services for non-residents wishing to purchase property in Portugal. They provide a range of mortgage options with up to 80% financing available.

With Banco Santander Totta, you can borrow between 75,000 and 1,000,000 EUR at an initial rate of 2.5%, which is competitive in the Portuguese market. However, depending on the customer profile, there may be a 0-1.5% opening fee.

Pros

• Offers a good choice for non-residents looking to buy property in Portugal
• They offer a range of mortgage options for non-residents, with up to 80% financing available

Cons

• An opening fee of up to 1.5%, which can increase the cost of securing a mortgage

UCI

UCI offers a fixed-rate option for the first five years of the mortgage loan at 4.65%. After the first 5 years, it's 1.64% + Euribor 6m.

However, the interest rates quoted do not include any potential bonus schemes or discounts that may be available through purchasing additional products with the bank.

Pros

• Flexible Portuguese mortgages with a wide offering for non-residents

Cons

• Fewer product options than other banks
• A potential opening fee which can increase the cost of securing a mortgage

Novo Banco

Novo Banco has various solutions for non-resident foreigners who need banking services in Portugal. If you are interested in purchasing a property, Novo Banco provides fixed-rate and variable-rate mortgages tailored to your specific situation, whether you are a resident or not.

The bank also offers insurance and investment funds for non-resident foreigners.

Pros

• Full remote banking that can remain close at hand when you are not in Portugal
• Flexible repayment options allow borrowers to choose a payment plan that works best for their financial situation 

Cons

• Mortgage offerings may not be the most competitive in the market for certain loan types, especially for those seeking longer-term mortgages

BPI

BPI offers a variety of mortgage options for non-residents looking to buy a second home in Portugal. Their mortgage for non-residents provides flexibility with fixed and variable rate options, with terms of up to 30 years.

The variable rate is 2.2% + Euribor 12m, and the term range varies between 1 and 30 years.

Pros

• The mortgage program allows for a loan amount range of 75,000 to 1,500,000 EUR
• Accepts several currencies, including EUR and GBP, and applicants from various nationalities and residency countries, making it highly accessible for a diverse range of non-residents

Cons

• The maximum loan-to-value ratio is 70%, meaning applicants would need to finance at least 30% of the property's value independently
• The debt-to-income ratio should not exceed 35%, potentially excluding those with higher levels of existing debt
• An opening fee of up to 1.0%, which can increase the cost of securing a mortgage

Crédito Agrícola

Crédito Agrícola offers both fixed and variable-rate mortgages extending to 40 years. This long repayment term facilitates manageable installments, easing the financial pressure on borrowers.

The variable-rate mortgage is 1.8% + Euribor 12m. This option is subject to market fluctuations and individual borrower circumstances.

Pros

• An impressive loan amount range from 75,000 to 2,000,000 EUR
• Accepts applicants from various nationalities and residency countries

Cons

• Crédito Agrícola limits its mortgage offerings to those earning in Euros and applying from abroad
• The maximum loan-to-value ratio is 70%, meaning buyers need to have at least 30% of the property's value available for the down payment
• The indebtedness must not exceed 35%

Comparison of the 6 Portuguese mortgages for non-residents

The cost comparison was made on June 1, 2023

This comparison includes the mortgage interest rate, but there are also other costs that you should consider when analyzing the bank fees.

In summary

When considering mortgage options for buying a property in Portugal as a foreigner, it is essential to consider the interest rates and the additional costs and fees associated with each loan. While some lenders may offer lower interest rates, they may also have higher fees that could make the overall cost of the mortgage higher.

To ensure that you are getting the best deal possible, compare multiple lenders and their offers before making a decision. It can be time-consuming, but fortunately, platforms like Homevest can help simplify it for you. With Homevest, you can easily calculate your budget and compare mortgages from multiple lenders all in one place.

By comparing mortgage options and utilizing tools like Homevest, you can feel confident that you are making an informed decision and getting the best possible deal for your new property.

Frequently asked questions

What are the qualifications for a mortgage loan in Portugal?

The qualifications for a mortgage loan in Portugal can vary depending on the lender. However, in general, some of the requirements for obtaining a mortgage loan in Portugal may include:

• Adequate income: The borrower must demonstrate sufficient income to afford the mortgage payments.
• Good credit score: The borrower's creditworthiness will be evaluated based on their credit score and credit history. Having a good credit score can increase the chances of being approved for a mortgage loan.
• Down payment: The borrower must make a down payment towards the property purchase. The minimum down payment required can vary depending on the lender and the type of property being purchased.
• Property appraisal: The lender will assess the property's value to determine the loan-to-value ratio (LTV). This ratio represents the percentage of the property value that the lender is willing to finance.
• Documentation: The borrower will need to provide various documents, such as ID, proof of income, tax returns, and property purchase contract, among others.

Fixed or variable interest rate. What’s the difference?

A fixed-rate mortgage means that the interest rate is locked in for the life of the loan and will not change, regardless of any changes in the market. This means that your monthly payment will remain the same throughout the loan term, providing a predictable and stable payment schedule.

On the other hand, a variable-rate mortgage means that the interest rate can change over time based on the current market conditions.

Portugal has long been a popular destination for foreigners, who have either settled there or invested in a holiday home. If you're considering doing the same, it's important to understand the process involved. Keep reading a guide that covers everything you need to know when buying a property in Portugal as a foreigner.

Sources used and checked on June 2023:

1. Millennium BCP Mortgages
2. Banco Santander Totta Mortgages
3. Caixa Geral de Depósitos Mortgages
4. Novo Banco Mortgages
5. BPI Mortgages
6. Crédito Agrícola Mortgages

We recommend obtaining professional or specialist advice before taking or refraining from any action based on the content in this article. The information in this article does not constitute legal, tax, or other professional advice from Homevest Limited. Prior results do not guarantee a similar outcome. We make no representations, warranties, or guarantees, whether express or implied, that the content in this article is accurate, complete, or up to date.